Bithumb Recovers Nearly All Bitcoin From $40 Billion Error

South Korea’s major cryptocurrency exchange Bithumb has confirmed it has successfully recovered 99.7% of the 620,000 BTC that were mistakenly credited to customer accounts during a promotional payout error.

This incident briefly shook market confidence and triggered a sharp but short-lived price dislocation on the platform.

The error, now widely described as one of the most expensive operational mistakes in crypto history, saw users accidentally credited with Bitcoin instead of Korean won after an employee reportedly typed “BTC” instead of “KRW” while processing a promo reward. As a result, hundreds of users received 2,000 BTC each, worth roughly $166 million per account, instead of the intended $1.50 reward.

Despite the staggering scale of the error, valued at over $40 billion at the time, Bithumb says the situation has been largely contained, with no evidence of hacking, on-chain transfers, or external breaches.

How A Simple Input Error Triggered A Market Shock

According to disclosures, the incident originated from an internal operational mistake during a promotional distribution. A staff member processing the reward input selected Bitcoin as the payout unit rather than Korean won, instantly crediting massive BTC balances to hundreds of customer accounts within Bithumb’s internal ledger.

Because the balances appeared legitimate within the exchange system, affected users were able to trade immediately. Some users, realizing the anomaly, sold their balances at once, overwhelming the order books and causing a flash crash on Bithumb alone.

Bitcoin briefly plunged to $55,000 on the exchange, representing a 19% drop compared to global markets. Importantly, the dislocation lasted just five minutes before prices normalized, as internal controls and account freezes took effect.

Crucially, no external Bitcoin transfers occurred, and no wallets were drained. The incident remained fully contained within Bithumb’s off-chain accounting system.

Rapid Response Limits The Damage

Bithumb moved quickly once the anomaly was detected.

Within 35 minutes, the exchange froze 695 affected accounts, halting further trades and preventing withdrawals. This rapid response proved decisive in limiting the scale of losses and preventing a broader liquidity crisis.

According to the latest recovery breakdown:

• 618,212 BTC recovered, representing 99.7% of the total

• 1,788 BTC sold by users before freezes

• 93% of sold BTC recouped through reversals and settlements

• 125 BTC still missing

While the missing balance represents a tiny fraction of the total error, Bithumb confirmed it will absorb all remaining losses using corporate funds, rather than passing costs onto users.

The exchange emphasized that the incident was not the result of a cyberattack, external exploit, or malicious activity, but a purely operational failure.

Bithumb Commits To Full User Reimbursement

In an effort to restore trust, Bithumb’s CEO announced a comprehensive reimbursement plan for affected customers.

Users who were forced to panic-sell during the brief crash will receive full compensation for all losses, plus an additional 10% payout as goodwill compensation. The move goes beyond standard reimbursement practices and signals the exchange’s intent to take full responsibility for the error.

The CEO acknowledged that even short-lived disruptions can cause real financial and emotional stress for traders, especially when market prices diverge sharply from global norms.

By covering losses directly from corporate reserves, Bithumb aims to reassure users that platform integrity and customer protection remain priorities, even when mistakes are costly.

Industry Support And Binance Involvement

The recovery effort also received behind-the-scenes support from industry peers.

Binance founder Changpeng Zhao (CZ) revealed that Binance assisted “a tiny bit” during the recovery process, helping coordinate containment efforts. He deliberately chose not to speak publicly while the incident was unfolding to avoid amplifying fear, uncertainty, and doubt.

His comments underscore a growing pattern of informal cooperation among major exchanges during crisis moments, particularly when swift coordination can help stabilize markets and protect users.

The collaboration also highlights how interconnected centralized exchanges have become, even as they compete for market share.

A Stark Reminder Of Operational Risk

While the recovery outcome has been largely positive, the incident serves as a powerful reminder that operational security remains one of the biggest risks in centralized crypto platforms.

Unlike on-chain exploits, which are often transparent and immutable, off-chain accounting errors can create massive distortions instantly, without any blockchain transaction ever occurring. A single incorrect input was enough to temporarily inject hundreds of thousands of Bitcoin into the trading system.

That reality reinforces a broader industry lesson: infrastructure maturity is not just about technology, but about process controls, approval layers, and human safeguards.

The fact that Bithumb managed to recover nearly all funds does not diminish the seriousness of the lapse. Instead, it highlights how quickly localized errors can escalate into market-wide events, even in 2026.

Confidence Restored, Lessons Learned

Bithumb’s swift response, near-total recovery, and commitment to overcompensate affected users have helped stabilize confidence following what could have been a catastrophic event.

The flash crash normalized within minutes, no external funds were lost, and users are set to be made whole, plus extra. From a damage-control perspective, the outcome could have been far worse.

Still, the episode stands as one of the clearest examples yet of why exchange risk never fully disappears. Even as crypto markets mature and infrastructure improves, human error remains a variable that no system can entirely eliminate.

For traders, the message is familiar but timely: centralized exchanges offer convenience and liquidity, but they also concentrate operational risk.

And for the industry as a whole, the Bithumb incident will likely be remembered not just for its scale, but for how quickly it showed that one keystroke can move billions.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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